Comcast/Sky: Why We Should Be Worried

by
David Mercer
| Apr 26, 2018

Comcast yesterday formalised its $31bn/£22bn bid for Sky, which is now the subject of a bidding war. Whatever the merits of the offer for shareholders, there are reasons for customers to be concerned if Sky does become part of the Comcast group.

The cornerstone of Sky’s strategy over the past nearly 30 years has been a focus on the customer. In Ofcom’s latest league tables Sky recently achieved the lowest levels of complaints of any major service provider in broadband, landline phone and pay TV. The strategy has also helped to make Sky the most innovative TV provider of any major global market.

By contrast, the US cable TV industry as a whole has had a notorious reputation for poor customer service for many years, which is one explanation for the defection of some customers to OTT or other services. In last year’s American Customer Satisfaction Index Telecommunications Report, Comcast came second from bottom of the 12 top providers in pay TV, 10th out of 11 in fixed line phone, and 8th out of 12 in internet.

I would be very concerned if Comcast did anything to change Sky’s strategy, not least its focus on superior customer service. If the deal goes ahead I would want to be reassured that Sky continues to be operated with minimal interference from the Comcast management which has delivered such poor service to its US customers.

If customers do end up being less happy with Sky under Comcast ownership, that will likely be bad for shareholders in the long run.